Is ULIP for short term or long term?

Is ULIP for short term or long term?

October 22, 2019 5:56 am,

Are you confused between long term and short term investments? Planning to invest in ULIP? Then you must underastand whether the the ULIP is for short term or for long term. Generally, ULIPs have a lockin period of 5 years. It is also one of the best mode for long term saving options.

So, we can say that, ULIPs are better for long term investment options compared to short term. ULIPs are the better return options than any other insyuarnces because of its equity advantage. The maturity amount is depenedent on the  performace of the equity market during the tenure.

So, if you are a long term invester and ready to take the market asscotaed risks then ULIPs are the best bet. Let us see the long term benefits of ULIPs

  • Lock in period:

ULIPS come with a lock in period of five years which can help you to inculcate the habit of disciplined investment.  Though the ULIP policy is bought once

  • Good long term benefits

Another benefit of long-term investment is that it sees through different economic cycles and averages out any losses due to short-term market movements. If you had invested ten years ago in Mayo r June of 2008, your investments would have experienced the worst of the crash in equity markets during 2008-09, then again another fall in 2011. Yet in 10 years, the Sensex index of the Bombay Stock Exchange has moved from around 8,000 levels to 38,000 levels – almost four times in 10 years.

  • Flexibilty

ULIP is long-term market-linked product that offers flexibility in many ways. It allows you to switch from one fund option to another anytime, depending on market conditions and your need. It also allows you to do partial withdrawals after the lock-in period. Top-ups and premium redirection is also allowed in many ULIPs.

  • ower expenses

Unlike old ULIPs, newer versions are low-cost. Many ULIP products not even charge for fund management charge, premium allocation or mortality charge.

  • Fulfil life goals

You can fulfil the life goals like wealth creation, child education, retirement or medical emergencies, ULIPs can fulfil every lifegoal.

  • Protects life

ULIPs provide life protection along with an investment option. In case of unfortunate event, nominee will be paid the sum assured or fund value, whichever is higher.

  • Income Tax benefits

ULIPs are the most tax efficient product that offer several advantages under Section 80C, Section 10 (10D) and Section 10(10A) of the Income Tax Act, 1961.

So, consiidring the above points we can conclude that ULIPs best suits for long term investments. This also provides life protection. Hence we can get dual benefit with ULIP.

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